One quarter of the nation's adults are now obese. Photograph: Anthony Devlin/PA

The chief executive of NHS England has warned that obesity will bankrupt the health service unless Britain gets serious about tackling the problem.

"Obesity is the new smoking, and it represents a slow-motion car crash in terms of avoidable illness and rising health care costs," Simon Stevens told public health officials at a conference in Coventry.

"If as a nation we keep piling on the pounds around the waistline, we'll be piling on the pounds in terms of future taxes needed just to keep the NHS afloat."

Stevens, who took up the post this year, said the health of millions of children, the sustainability of the NHS and the economic prosperity of Britain all now depend on a radical upgrade in prevention and public health.

Local authorities have been given responsibility for tackling obesity, as part of their new public health remit. Money for public health has been ringfenced by the government, but individual authorities are free to spend it according to the needs and priorities in their own area. Some experts fear that obesity, which is hard to tackle and needs the involvement of town planners and education departments as well as health, may not get the funding it needs.

Speaking at the annual conference of Public Health England, which is responsible for advising and monitoring the work of the local authorities, Stevens made it clear that obesity could have a catastrophic impact not only on the nation's health but on the nation's health service. Nearly one in five secondary school age children and a quarter of adults are obese – up from 15% just twenty years ago, Simons pointed out. If obesity is not checked, there will be a huge rise in avoidable illness and disability. Type 2 diabetes, largely caused by overweight and obesity, already costs the NHS around £9bn, according to Diabetes UK.

Stevens' proposals for the way forward for the NHS will be published in a report next month. The Five Year Forward View will suggest a number of actions that could make a difference.

• Many of the diseases that shorten lives and put people in hospital are preventable. The report will call for a shift in NHS investment towards targeted and proven prevention programmes. The NHS is now spending more on bariatric (stomach shrinking) surgery for obesity than on the national rollout of the intensive lifestyle intervention programmes that were first shown to cut obesity and prevent diabetes over a decade ago.

• New incentives to ensure the NHS as an employer sets an example. Stevens wants its 1.3 million staff to stay healthy and become health ambassadors in their own communities. Although 75% of NHS Trusts offer their staff help to stop smoking, only a third offer help to keep to a healthy weight. Three-quarters do not provide healthy food for staff working night shifts.

• Local councils and mayors should have "devo-max" powers to make decisions over fast food, alcohol, tobacco and other public health matters in their own areas. Stevens cites the public health leadership of Mayor Michael Bloomberg, who banned smoking in public places and has taken tough action against junk food marketing, including his attempt to ban super-size cartons of colas in New York.

Professor Jonathan Valabhji, NHS England's national clinical director for obesity and diabetes, believes obesity is a significant public health issue.

"We are seeing huge increases in type 2 diabetes because of the rising rates of obesity, and we clearly need a concerted effort on the prevention, early diagnosis and management of diabetes to slow its significant impact not only on individual lives but also on the NHS," he said.